Sunset News: Automakers need 'systemic change,' perhaps bankruptcy

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Thursday, November 20, 2008

Automakers need 'systemic change,' perhaps bankruptcy

Automakers need 'systemic change,' perhaps bankruptcy
Jim Brown - OneNewsNow - 11/19/2008 4:00:00 AM

A U.S. senator is advising the American auto industry to file for Chapter 11 bankruptcy and change management under reorganization.

Senate Democrats are seeking to take $25 billion of the massive financial bailout to pay for loans to Detroit's Big Three automakers -- Chrysler, Ford, and GM. However, the White House and Republicans in Congress want the automaker bailout money instead to come from redirecting a separate $25 billion Department of Energy loan program already approved by Congress to help the industry develop more fuel-efficient vehicles. Oklahoma Republican Senator Jim Inhofe says the auto industry is struggling because of both union and management problems. "If we were to go in there, just say, and drop $25 billion on our Big Three, do you think that they would actually change the way they operate? I don't think so," he contends. He believes that instead of treating the symptoms, the industry ought to evaluate a deeper-rooted problem. "I think that they need to have a systemic change, a change in the way they've been doing business," he explains. "They ought to fire the people who are responsible for getting them in the position they're in. They ought to renegotiate their union contracts and let people know that they need to survive, maybe even file bankruptcy." Inhofe says if the auto industry files bankruptcy, labor unions might get the message that they "can't negotiate to the point where they run a company under."

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